I found the following two article informative as to who I should be thinking about not only the possibility of QE3, but also the expectations surrounding the monetary value the market could could consider a disappointment, and how a number of assets classes reacted to past QE/Op twist actions.
First via ZeroHedge.....
...... if we assume the ECB will be doing it's bond-buying monetization thing - as per the equity market's expectations - then the Fed will need to come to the table with a bag of swag around USD850bn in order to debase the USD just enough to regain some hope.
And the second via The Big Picture...
More charts are available at Ritholtz's site.
If history is a guide and if the analysis at ZeroHedge is correct, anything less than $850 million will likely send the stock market and commodities lower. I would place the odds that treasury yields move in that scenario at a pick'em. But lets say QE comes in as expected, whatever the magic number is. In this scenario, and again using history as a guide, treasury yields are likely to retreat from recently low levels while commodities are likely to perform well. As for the stock market, there may be some more upside, but guess is that it would be limited. We are already seeing some cracks in the markets facade, as large names Apple and 3M are showing weakness.
First via ZeroHedge.....
...... if we assume the ECB will be doing it's bond-buying monetization thing - as per the equity market's expectations - then the Fed will need to come to the table with a bag of swag around USD850bn in order to debase the USD just enough to regain some hope.
And the second via The Big Picture...
More charts are available at Ritholtz's site.
If history is a guide and if the analysis at ZeroHedge is correct, anything less than $850 million will likely send the stock market and commodities lower. I would place the odds that treasury yields move in that scenario at a pick'em. But lets say QE comes in as expected, whatever the magic number is. In this scenario, and again using history as a guide, treasury yields are likely to retreat from recently low levels while commodities are likely to perform well. As for the stock market, there may be some more upside, but guess is that it would be limited. We are already seeing some cracks in the markets facade, as large names Apple and 3M are showing weakness.
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